On December 23, 2024, the United States Court of Appeals for the Fifth Circuit lifted a temporary nationwide injunction that halted the Corporate Transparency Act’s implementation and enforcement of the new Beneficial Ownership (BOI) Rule.

However, on December 26, 2024, the Court reinstated the injunction, again blocking FinCEN’s enforcement of the BOI Rule.

For a bit of background, in 2021, Congress passed the Corporate Transparency Act. One of the primary purposes of the law is to prevent illicit financial crimes and to stop the formation of anonymous shell companies. In March of 2023, the Financial Crimes Enforcement Network (FinCEN) published its first set of guidance materials.

FinCEN’s BOI Rule initially went into effect on January 1, 2024. The rule requires certain business owners to provide personal identifiable information to FinCEN. While some business entities are exempt from this reporting requirement, a real estate firm that is a corporation or LLC would be required to report. Basically, if you created your company by filing a document with a secretary of state, then you most likely are required to report. If you are a sole proprietor and you did not create the proprietorship by filing a document with a secretary of state or similar office, then you are not a reporting company.

On December 3, 2024, a Texas federal court issued a preliminary national injunction halting implementation of the BOI Rule. While the injunction was in place, companies were not required to report their beneficial ownership information. However, the government appealed the injunction, and on December 23, 2024, the Circuit Court of Appeals granted the government’s appeal, lifting the injunction and reinstating enforcement of the BOI Rule.

The injunction was lifted for only a matter of days before the Circuit Court of Appeals reinstated it on December 26, 2024. Therefore, reporting companies are currently not required to file beneficial ownership information at this time.

Additional information on the BOI Rule is available at https://fincen.gov/boi.